General Motors Q1 2016 Earnings Call

GM CEO Marry Barra called out the strength of their Buick brand in China

“If we move to China with our joint venture partners, we delivered over 963,000 vehicles, up slightly from Q1 2015, thanks to the growth in SUV and the luxury segment. The Buick Envision sales more than doubled and when we include the Baojun 560, total SUV sales jumped 148%. We’re also very excited about the new Buick LaCrosse sedan that was introduced, that can continue to build on the strength of Buick in China.”

Getting into the car sharing business

“Maven City offers cars on demand in key cities driven by on OnStar-powered smartphone connectivity that really provides the customers an ownership-like experience. And Maven+ is a completely dedicated private fleet for residential community. We started this in New York City, as I’ve talked about it in the past. We’re going to soon be adding Chicago and this will give us the potential to reach more than 5,000 residents.”

GM CEO Marry Barra defended the $1 billion dollar acquisition of autonomous driving startup Cruise Automation 

“And when you look at the specific technologies that are necessary, which there are many and there’s still, I will say, critical development on the mainline, the expertise and the work that’s already been done by Cruise, we saw as something that would really accelerate our ability to lead from an autonomous perspective.  And I think from a shareholder perspective, we are always looking at ways that we can lead and get there more quickly and make the decision of do we partner, do we buy or do we develop internally. And as we looked at the capability, we clearly thought, and our vision of the future again of where Cruise was headed, we were very much aligned similar to the way we were with Lyft and we saw this as a huge opportunity to really accelerate our performance in autonomous.”

GM CFO Chuck Stevens expects used car pricing to moderate 

“Used car pricing has been at all-time highs over the most recent couple of years and from a planning perspective, we expect moderation in used car pricing. That’s built into both the auto company as well as GMF’s expectations, and we’re seeing that play out kind of as we expected. So, no material exposures, no material risk and as I said, as we anticipated a moderation in used car pricing is built into our baseline plan.”

GM CFO Chuck Stevens said the company’s truck business has never been stronger

“We had just under 38% retail share in the first quarter. We continue to lead in the industry, we just launched a refreshed truck, which will carry us to the next generation truck, and we feel very confident that we’ll be able to protect those pools, because we’ve got great products.”

GM CEO Marry Barra dismissed the idea of launching a new standalone brand focused solely on electronic vehicles 

“But when you look at it, first of all, we have two global brands, Chevrolet and Cadillac, and there is also pure EV like we have with the Bolt EV that will be coming out later this year, we have extended range electric vehicles with the Chevrolet Volt. But then we also have a lot of electrification, the Malibu Hybrid and we’ll be launching over 10 new electrified vehicles in China. So to us really the electrification is something that we integrated in the portfolio that allows us to build not only our capability and spread it broadly and reach more customers, but also to build those brands so they’re viewed appropriately as technology leaders. And I think we continue to do that, so we see it as core and integrated.”

Pricing pressure in China remains a challenge 

“Nothing has changed vis-à-vis the China fundamentals versus what we’ve been talking about for the last year or so. Fundamentally price continues to be a challenge. Last year it was in the range of 4% to 5% negative price headwinds. On carryover, we expect that same level this year. That’s what we’ve seen play out so far in the first quarter. And we’re offsetting that impact through improved, significantly improved mix and you saw some of those results. The Envision as an SUV, sales up significantly; the Baojun, 560, we’re launching critical new products like the Cadillac CT6 and Cadillac XT5. So mix has been a mitigant to the price headwinds, as well as carryover material performance and kind of when I look at those two together, they kind of offset the price headwinds and where you see the benefit, at least on an aggregate equity income or profit perspective is volume.”